Positive Results Lifted Alphabet (GOOGL) in Q2

Oakmark Funds, advised by Harris Associates, released its “Oakmark Select Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund underperformed the benchmark, the S&P 500 Index, while it has outperformed the benchmark since inception. Financials and consumer discretionary were the largest contributors at the sector level, while health care and energy detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Oakmark Select Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOGL). Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOGL) was 5.57%, and its shares gained 1.08% of their value over the last 52 weeks.  On July 1, 2025, Alphabet Inc. (NASDAQ:GOOGL) stock closed at $182.97 per share, with a market capitalization of $2.225 trillion.

Oakmark Select Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its second quarter 2025 investor letter:

"Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. The U.S.-headquartered technology company’s stock price rose relatively steadily throughout the period after it delivered solid first-quarter 2025 earnings and mega-cap tech stocks trended higher. Despite concerns around incremental competition, Google Search revenue grew low-double digits and was slightly ahead of consensus forecasts. Operating income was also ahead of expectations, with Alphabet improving margins even as the company continues to make substantial investments in AI. We believe the potential payoff from these investments across each of Alphabet’s business units remains underappreciated. After adjusting for the value of Google Cloud and Alphabet’s Other Bets, we believe the Search, YouTube and Android businesses are being valued at a low-teens price-to-earnings (P/E) multiple. We still see this as an attractive valuation."

Alphabet Inc. (NASDAQ:GOOGL) is in 4th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 227 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOGL) at the end of the first quarter, which was 234 in the previous quarter. While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Alphabet Inc. (NASDAQ:GOOGL) and shared the list of best US stocks to buy according to billionaires. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.